PRIVATE AND CONFIDENTIAL


                                        November 4, 1996




Richard E. Thomas
8207 Light Horse Court
Annandale, VA  22030

Dear Dick:

     In consideration of the mutual premises set forth herein,  this letter
agreement (the "Agreement")  between COMSAT Corporation  ("COMSAT") and you
amends and  supersedes the  employment  agreement by and among COMSAT,  CTS
America,  Inc.  and you  dated as of  January  30,  1994  (the  "Employment
Agreement")  in order to reflect  your desire to step down as  President of
COMSAT  RSI,  Inc.  ("CRSI"),  the mutual  desire  that you  continue  your
employment with CRSI by providing  certain  consulting  services during the
balance of the employment period under the Employment  Agreement,  and your
retirement  from CRSI at the end of such period.  Subject to the conditions
listed  below,  you will  remain in the employ of CRSI as  described  below
through June 3, 1997 (the  "Retirement  Date").  Based on the foregoing and
the terms and conditions stated below, COMSAT and you agree as follows:

1.   (a) You have resigned as President of CRSI effective September 20,
1996 (the "Effective Date").

     (b) You  will  retire  from  CRSI on the  Retirement  Date,  and  your
employment with CRSI will thereupon terminate.

     (c) During the period from the Effective  Date through the  Retirement
Date (the  "Transition  Period"),  as an employee of CRSI you will  provide
advisory and consulting services to COMSAT and CRSI with respect to matters
which may arise in connection  with your former duties as President of CRSI
("Consulting  Services"),  from  time  to  time as  requested  by the  Vice
President,  Human Resources and Organization Development of COMSAT (the "VP
of HR") or the head of CRSI,  subject at all times to your  availability to
provide such services.  All requests for  Consulting  Services will, to the
greatest extent possible,  be made with sufficient  advance notice to allow
you to coordinate  your schedule and will be coordinated  between the VP of
HR and the head of CRSI to the  extent  necessary  to ensure  no  conflicts
between their respective  requests.  All such requests will be made in good
faith and with 

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Richard E. Thomas
November 4, 1996
Page 2


a view not to place excessive demands upon your time and energies. You will
be reimbursed for all reasonable expenses in connection with your provision
of Consulting Services.

     (d) In  consideration  of  your  rights  and  obligations  under  this
Agreement,  including your provision of the Consulting Services, during the
Transition  Period  COMSAT and CRSI will continue to pay you your salary at
your current rate of compensation and, except as otherwise provided in this
Agreement,  will  provide you with all benefits  that were  provided to you
immediately  prior  to  the  Effective  Date  as a  member  of  the  senior
management group,  including,  but not limited to, the COMSAT Insurance and
Retirement  Plan for  Executives  (the  "SERP"),  the COMSAT  Directors and
Executives   Deferred   Compensation   Plan,   the   COMSAT   Savings   and
Profit-Sharing  Plan,  the COMSAT  Employee  Stock  Purchase Plan, the CRSI
Employee Stock  Ownership  Plan,  the CRSI health and disability  insurance
programs,  and financial counseling.  In addition,  you will be entitled to
receive a cash bonus of $90,000 under the COMSAT Annual Incentive Plan (the
"AIP") with respect to 1996,  such bonus to be payable in February  1997 at
the same time other AIP bonuses are paid. However, except as provided above
in this  Paragraph  1(d),  during the  Transition  Period,  you will not be
eligible for salary increases of any nature, cash or stock-based bonuses or
awards of any nature,  outplacement  assistance or educational  assistance,
any or  all of  which  may be  available  to  other  employees.  Except  as
otherwise  provided in this Agreement,  for all purposes of COMSAT and CRSI
service credit, your last date of employment will be the Retirement Date.

     (e) During the  Transition  Period,  the stock options and  Restricted
Stock Awards  previously  granted to you under the 1990 and 1995 COMSAT Key
Employee  Stock  Plans  pursuant  to  Sections  3 and 4 of  the  Employment
Agreement or otherwise,  and the Phantom Stock Units previously  granted to
you under the AIP will continue to vest in accordance  with their  original
terms.

     (f) Except as provided in Paragraph 3 of this Agreement,  the $100,000
retention  bonus  provided  for  in  Section  2(d)(iv)  of  the  Employment
Agreement will be paid to you on the Retirement Date.

     (g)  Beginning  on July 1, 1997,  the first day of the month after the
Retirement Date, you will receive SERP retirement benefits  calculated,  as
approved  by the  COMSAT  Board of  Directors,  with the  inclusion  of the
retention  bonuses  previously  paid  to  you  under  Section  2(d)  of the
Employment Agreement, plus the retention bonus payable under Paragraph 2(f)
of this Agreement, unless such retention bonus payable under Paragraph

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Richard E. Thomas
November 4, 1996
Page 3

2(f)is  forfeited  pursuant  to  Paragraph  3 of this  Agreement.  Based on
preliminary  calculations  which  are  subject  to  final  adjustment,  the
estimated annual SERP retirement benefit you will receive beginning on July
1, 1997 is $278,435.

     (h) CRSI at its expense will transfer to you title of the car you are
currently using pursuant to the Employment Agreement.

     (i) During  the  Transition  Period,  you will be free at all times to
seek, take on and perform other business and employment  opportunities  and
responsibilities  outside  CRSI  ("Other  Business"),  whether  or not  for
compensation,  without limitation and without any effect on the obligations
of COMSAT to you under this  Agreement,  subject only to the express  terms
and  conditions  of this  Agreement.  In the event of a conflict  between a
request for Consulting  Services and your Other Business,  you will resolve
such conflict in your reasonable  discretion after consultation with the VP
of HR.

     (j) The  Employment  Agreement is hereby  terminated  on the Effective
Date of this  Agreement,  except that the provisions of Sections 3, 4 5, 6,
7,  8(b)(ii)  and  (iii),  9(b) and (c),  10,  11,  12, 13, 14 and 15 shall
survive the termination of the Employment Agreement.

2.   You agree to the general  release and covenant  not to sue  contained in
this  paragraph 2. It is  understood,  however,  that this release will not
waive your right to pursue  any claim for  benefits  or any rights to which
you are or may be entitled under this  Agreement,  your  employment by CRSI
from the Effective Date through the Retirement Date in accordance with this
Agreement,  the SERP, or any other  payments or other benefits to which you
are entitled,  or will become  entitled  after your  retirement  from CRSI,
pursuant  to the  specific  terms of this  Agreement  or any COMSAT or CRSI
employee  benefit  plans  in which  you are a  participant.  It is  further
understood   that  this   release   will  not  (i)  waive  any   rights  to
indemnification  from COMSAT you may be entitled to under COMSAT's Articles
of  Incorporation  or By-Laws or (ii)  vitiate any rights you may have as a
shareholder  of  COMSAT,  provided  that  you  agree  that you will not (x)
participate as a named plaintiff in any  shareholder  action against COMSAT
or its directors and officers for any acts,  omissions or events  occurring
during the period commencing on June 3, 1994 and ending on December 3, 1997
or (y) recover as a  shareholder  of COMSAT any damages or other  relief in
any such action which is not  recovered by COMSAT's  directors and officers
in their capacity as shareholders of COMSAT.

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Richard E. Thomas
November 4, 1996
Page 4

     (a) Except as provided  above in this  Paragraph  2, you, on behalf of
yourself and your heirs, executors, administrators, successors and assigns,
agree to release,  discharge and covenant not to sue COMSAT, its affiliated
companies   and   its  and   their   predecessors,   successors,   assigns,
shareholders,  directors, officers, employees, administrators,  fiduciaries
and agents, in their individual and representative  capacities (hereinafter
referred to collectively as "COMSAT") with respect to all claims,  charges,
causes of action,  liabilities,  suits,  debts and demands,  of any kind or
nature,  which you had, have or may have against COMSAT up to the Effective
Date (collectively "Waived Claims"), including, without limitation, (i) any
claims relating to your employment with COMSAT; (ii) any claims relating to
the Employment  Agreement;  (iii) any claims relating to the termination of
your employment pursuant to the terms of this Agreement,  including but not
limited to your  agreement to retire and the resulting  termination of your
employment  effective on the Retirement  Date, under the arrangement as set
forth  herein;  (iv) any  claims  relating  to the  terms,  conditions  and
benefits  associated  with  such  employment  or  your  retirement  and the
resulting  termination of your employment;  (v) any claims under any local,
state or federal  antidiscrimination  law,  including,  without limitation,
Title  VII  of  the  Civil  Rights  Act  of  1964,  as  amended,   the  Age
Discrimination  in Employment Act, the Americans With Disabilities Act, the
Employee  Retirement Income Security Act of 1974, as amended,  and the Fair
Labor  Standards  Act;  (vi) any claims at common law,  including,  without
limitation,  claims  for  breach of an  express  or  implied  contract,  or
wrongful discharge; or (vii) any other claims, statutory or otherwise.

     (b) You agree not to encourage,  initiate or  participate in or assist
in any way in any  individual  or class action  lawsuit or  administrative,
arbitral or other  proceeding  against  COMSAT  with  respect to any Waived
Claims in any forum on behalf of yourself or others, unless compelled to do
so by legal  process or court order.  You further agree to waive any remedy
or  recovery  in any  action  which may be  brought  on your  behalf by any
governmental agency or other person with respect to any Waived Claims.

3.   You understand and agree that your employment status with CRSI during
the  Transition  Period and the salary and  benefits  provided  during such
period,  together  with the retention  bonus payable  pursuant to Paragraph
2(f), are conditioned  upon the following and that if you breach any of the
following during such period, you will forfeit the retention bonus and your
employment,  salary and benefits provided during such period will terminate
effective on the date upon which COMSAT  provides  written notice to you of
such termination:

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Richarg E. Thomas
November 4, 1996
Page 5

     (a) You will not criticize, disparage, slander, defame, impugn or make
any  statement to third parties  orally or in writing,  or take, or omit to
take,  any  other  actions  that will  damage or harm  COMSAT or any of its
subsidiaries or affiliates,  or their respective officers and directors, or
the reputations of any of them.

     (b) You will  cooperate as reasonably  requested by the Vice President
and General Counsel of COMSAT or his designee in assisting  COMSAT and CRSI
to defend the Flora lawsuit or any other existing or  prospective  lawsuits
or  administrative  or regulatory  proceedings that arise out of or involve
matters or events which occurred on or before the Effective Date.

4.   This Agreement is strictly confidential. You agree, that, until such
time as this  Agreement  becomes  public  as a  result  of its  filing,  if
required,  by COMSAT  with the  Securities  and  Exchange  Commission  (the
"SEC"),  or  except as  agreed  upon in  writing  by  COMSAT,  you will not
communicate, publish or disclose, in any manner, the terms, nature or scope
of this Agreement to any person except:  (a) as may be required by law; (b)
to your attorneys,  accountants,  financial counselors, or tax consultants;
or (c) to members of your immediate  family.  In the event that information
described  in this  Agreement is revealed to your  attorneys,  accountants,
financial  counselors,  tax  consultants  or immediate  family as permitted
herein before this Agreement  becomes public as a result of its filing with
the SEC, such person(s)  shall be advised of this  non-disclosure  covenant
and be  instructed  that  they  are  bound  not to  publish,  disclose,  or
otherwise  disseminate  such  information in the same way you are bound and
that you are responsible for any unauthorized disclosure by such recipient.

5.   Because of the nature of the terms of this Agreement, and the general
release  and  covenant  not to sue  contained  herein,  by agreeing to this
Agreement you acknowledge that you have been advised, in writing, by COMSAT
to consult with an attorney  prior to executing  this  Agreement,  that you
have had an opportunity to do so and that you understand the nature,  terms
and effects of this Agreement,  and the general release and covenant not to
sue. You further  acknowledge that COMSAT has not made any  representations
to  you,  or  your  agents  or  successors  and  assigns,  concerning  this
Agreement, or the general release and covenant not to sue, other than those
contained herein. In addition,  you acknowledge that you have been informed
that you have the right to consider and review this  Agreement for a period
of at least  twenty-one  (21)  days,  and that you have the right to revoke
this Agreement for a period of seven (7) days following its execution,  

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Richard E. Thomas
November 4, 1996
Page 6

and that this Agreement  shall not become  effective or  enforceable  until
such seven (7) day period has expired.

6.   Finally,  you  agree and  acknowledge  that  this  Agreement,  and the
general release and covenant not to sue contained herein, shall not operate
or be construed  as an admission by COMSAT or CRSI of any  violation of any
local,  state or federal statute or regulation or of any duty at common law
or otherwise owed to you, your successors or assigns.

7.   You will be  entitled  to  indemnification  as  provided  in  COMSAT's
Articles  of  Incorporation  and By-Laws  and to  coverage  under  COMSAT's
directors and officers liability insurance policy as provided therein.

8.   This Agreement shall inure to the benefit of, and is binding upon,
COMSAT and you and our respective heirs, executors, administrators,
successors, representatives and assigns.

9.   This Agreement may not be modified or amended except in writing signed
by the parties.

10.  A waiver of a breach of any provision of this Agreement will not
constitute  a waiver of any  subsequent  breach of the same  provision or a
waiver of a breach of any other provision of this Agreement.

11.  This Agreement shall be governed by and construed in accordance with
the laws of the State of Maryland  without  giving  effect to  conflicts of
laws principles thereof.

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Richard E. Thomas
November 4, 1996
Page 7

     If you agree to the  foregoing,  please  sign both  originals  of this
Agreement  in the space  provided  below and  return  one  original  to the
undersigned.

                             COMSAT Corporation


                                   /s/ Steve Bell
                              -----------------------------------
                              By:  Steve Bell, Vice President
                                   Human Resources and
                                   Organization Development


Agreed and Acknowledged:


/s/ Richard E. Thomas
----------------------------
Richard E. Thomas


6 November 1996
----------------------------
Date


Enclosure:  Duplicate Original

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